Bitcoin is facing increased risks as market sentiment turns bearish, according to CryptoQuant analyst Axel Adler Jr. The advanced sentiment index for Bitcoin has dropped to 40, indicating a distribution zone. Investor sentiment remains weak, with many short-term holders experiencing losses and the price trading below key cost bases. Adler identified $56,300 as a crucial support level for Bitcoin. Recent developments, such as the Bank of Japan's rate hike and slowing ETF inflows, suggest growing investor caution.